EUR – A positive end to last week in EURUSD and EURxxx, EURJPY closing above its weekly cloud the stand out, already seeing some early corp demand for EURUSD on the open as Asia shrugged off the anticipated news of a pro-referendum majority in Catalonia and now eyes turn to whether Greece will be granted its next tranche of money. The likelihood is such that today’s meeting will provide a positive outcome but any relief rally will have to overcome pretty good resistance around 1.3010/20, our orderbook has offers between 1.2990/1.3010, as such don’t think its worth buying EURUSD at these levels. Wait for a pullback to 1.2930/40 unless we have further delays from the meeting in which case the pullback may be greater.
GBP – No UK data today. I must confess the moves into the end of last week had me baffled. No obvious catalyst and I didn’t think the market was positioned against a risk on move. I was in fade mode but took most of my short positions against the USD back. Today I am wary of trying similar tactics but still favour fading overall, if the moves continue. I still feel the risks around Greek aid are skewed, with disappointment, (maybe from the IMF) causing a severe reaction lower in EUR. Cable has short term resistance at 1.6040 but 1.6070 represents better tech resistance. No significant levels above there though until 1.6178. Support, 1.5980, 1.5955 and 1.5910. EUR/GBP pops through 0.8100 but didn’t recapture 0.8115. 0.8073 sees support in the form of the 200 dma. Moves in EUR/USD will decide its fate. I run small short still and will look to add on news driven reaction on Greece, or a move back through 0.8070.
JPY – Big rally on the x’s friday with eurjpy driving us and getting the weekly close above 106.65/75 cloud top. We have backed up into the ldn open with selling from exporters and gamma guys so it will be interesting to see how usdjpy plays out now after another failed attempt towards 82.60/80. Support is fridays lows at 00/05 then 81.45/60 should be a good lvl to buy again on any dip – Topside 82.60/80 become a decent resistance ahead of these barriers 83.00/83.25/83.50. Expecting model demand today in x/jpy so we wait and see if this can drive us back towards 82.50/107+, if not mkt may start to take a look lower again, which i still remain convinced provides good opportunities to buy 81.45/60.
AUD/NZD – a quiet start to the week after the squeeze higher on Friday, we remain just below the highs of last week with very little flow of note overnight. 1.0475/85 is the first level of note, above here 1.05 figure but this one more psychological than anything. CAPEX data mid-week will be the domestic catalyst to watch out for, rhetoric hasn’t been good especially from the mining-sector but with the RBA next week this could be an important swing factor for the board. I expect dips to be shallow ahead of the data print, 1.0420/25 the first level of note below having tried a number of times to crack this on the ascent higher. Book largely uninspiring, offers above and bids below suggestive of a market long gamma and trying to capture any realised move (irrespective of the magnitude). NZD continues to perform strongly, AUDNZD edging lower though it has been very dull for the most part. Trendline support kicks in 1.2635/40, I expect this to be well-supported initially. I am square cash in both AUD and NZD, will update as this changes throughout the day.
CAD – USDCAD the last of the commods to really catch up to the risk positive feelings in fx on Friday afternoon, lots of corp demand around 0.9950 saturated and once we broke below we saw some fresh spec selling which helped us down to 0.9916. If risk can continue to stabilise at the start of this week think its worth selling USDCAD against 0.9950 but certainly for today it’s a Euro-centric focus with EURCAD resistance around 1.2890/1.2900 potentially coming into play if we get some positive Greek resolutions. CADJPY still marching higher but only because USDCAD took up the baton as USDJPY had a breather, technically this still looks like there is room higher, we have a few stops above 83.10/20 and everyone still looking to buy a dip in USDJPY so cant see why this wouldn’t apply to CADJPY. Square for now but looking to sell USDCAD rallies. Resistance 0.9950 1.0000 1.0050. Support 0.9910 0.9900 0.9875.
Scandies – I still think there is more downside room for EURSEK pre the entertainment of December (Riksbank and pension flow the stand outs) but I think 8.50 is a psychological line in the sand that will be tough to break initially. Still data and flow to navigate this week, PPI and consumer confidence tomorrow and then GDP on Thursday could make things interesting, think there will be stops in EURSEK below 8.56/55 and then bids ahead of 8.50. Lots of NOKSEK selling back end of last week which is supporting EURNOK ahead of 7.34/33 for now, should be more stops in NOKSEK below 1.1680 though but would like to sit with a core long EURNOK position this week and will add below 7.30. EURSEK support: 8.58 8.55 8.50 resistance 8.65 8.68 8.72. EURNOK support: 7.30 7.28 7.24 resistance: 7.40 7.45 7.50.
Barclays Capital